Libyan Oil Output Cut by Half as Foreign Firms Depart

Monday, 28 Feb 2011 10:41 AM

 

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The unrest in Libya has cut oil output by half in the world's 12th largest exporter, the West's energy watchdog, the International Energy Agency said on Monday, more than it initially estimated.

Foreign firms have been pulling staff out of Libya due to the uprising against Muammar Gaddafi's rule. China's three major state-owned oil and gas companies have evacuated all their Chinese employees, the companies said.

About half of Libya's 1.6 million barrels per day (bpd) of production had been cut, IEA Chief Economist Fatih Birol told Reuters Insider TV at the IEA's Paris headquarters, citing industry reports.

Oil prices jumped towards $120 a barrel last week for the first time since 2008 because of the disruption in Libya. Prices have since eased to $112, partly because top world exporter Saudi Arabia has promised to meet any shortages.

"This is not good news for suppliers in the market but at the same time it is very comforting that Saudi Arabia showed their readiness to make up," Birol told Reuters in the interview.

He added there was a major risk of derailment for the global economic recovery if prices remained at current levels for the rest of the year. The IEA advises 28 industrialized countries on energy policy.

Libya's crude oil exports and oil tanker loadings remained disrupted on Monday, keeping the bulk of Libya's 1.3 million bpd of exports off the market.

The exact scale of the cut in Libya's oil output remains unclear partly because of disrupted communications links with the country.

U.S. oil firm Marathon Oil said on Monday it evacuated all expatriate employees and their dependents from Libya, but that the full extent of the impact of the unrest on its oil and gas output was uncertain.

Marathon holds a 16.33 percent interest in the Waha Concessions in Libya in which the Libyan National Oil Corp holds a 59.16 percent working interest, Marathon said.

Libyan oil officials have been mostly unavailable for comment, but one said on Sunday the Hamada field had ceased production and the eastern fields of Sarir, Nafoora and Misla were producing at about half normal capacity.

"Right now, the production is minimal, possibly 20,000 bpd," said a spokesman for the Arabian Gulf Oil Company, referring to the Nafoora field.

Among the highest estimates of the Libyan outage came from Italian oil company ENI, which last week said Libya's oil output had been slashed by 1.2 million bpd, or 75 percent.

© 2014 Thomson/Reuters. All rights reserved.

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